Wallace Hall: The TT Interview

Dallas businessman Wallace Hall, Jr. takes notes at the University of Texas Board of Regents meeting on Feb. 14, 2013 in Austin.

Updated, 11:50 a.m.: Former University of Texas School of Law Dean Larry Sager has issued a statement responding to University of Texas System Regent Wallace Hall's comments in the interview below.

Here is Sager's full statement:

"In an interview published by the Texas Tribune on Tuesday, June 25, 2013, University of Texas Regent Wallace Hall made several demonstrably false and defamatory remarks regarding my actions during my service as Dean of the University of Texas Law School. In the interview, Mr. Hall said that I concealed an unauthorized grant to myself. Both assertions are demonstrably false. The compensation package in this connection was formally approved and awarded by the executive committee of the Law School Foundation, a group consisting of some of the most distinguished lawyers and business figures in the United States. Far from being concealed, the details of the compensation package were reported to the appropriate University officials.

Mr. Hall goes on in his interview to imply that the compensation package was "illegal or improper." These, too, are baseless and injurious claims.

It is hard not to conclude that Mr. Hall has willfully and maliciously misstated these facts to serve some end other than the truth. His remarks are baldly defamatory and cannot go unchallenged. Legal action may be the only effective resort."

Original Story: University of Texas System Regent Wallace Hall is on the verge of making history. House Appropriations Chairman Jim Pitts, R-Waxahachie, filed a resolution this week to formally begin the process of impeaching him, which — if successful — would be a first for a public university system regent in Texas.

Hall has generated headlines for making voluminous requests for information from the University of Texas at Austin, failing to disclose some lawsuits on his application to be a regent, and sticking his nose in the flagship university’s development operations to the extent that he attended a meeting of the Council for Advancement and Support of Education in Washington, D.C., to challenge UT-Austin’s reporting of in-kind software donations. (More than $200 million in software donations were ultimately removed from the totals of the university's $3 billion capital campaign.)

In Pitts’ House Resolution 230, Hall’s behavior as a regent is called into question. It alleges that he "may have obtained that office through misrepresentation of material facts regarding his experience and qualifications" and "may have abused that office by making numerous unreasonably burdensome, wasteful, and intrusive requests for information."

Previously, Pitts has accused Hall and other board members of being on a “witch hunt” targeting University of Texas at Austin President Bill Powers. Even some of Hall’s fellow regents have described his actions as “divisive.”

This year, much of the controversy has stemmed from Hall’s push for a new investigation of a forgivable loan program for law school faculty formerly run by the University of Texas Law School Foundation following an initial probe by former UT System General Counsel Barry Burgdorf that he deemed insufficient. The attorney general’s office is currently reviewing the matter.

Hall, who has rarely spoken publicly since his appointment to the board in 2011, spoke with the Tribune on Monday about the unfolding situation. The following is a transcript of that conversation.

Texas Tribune: What is your motivation for repeated requests for significant amounts of information? Why have you not been more public about your motivations?

Wallace Hall: My initial review of the pre-existing open records documents was part of an effort to make system-wide improvements in how we manage our TPIA requests. Over time, it has become a very important source of information for the board and the chancellor in our official duties, and this is especially true with regard to the law school, the foundation and the administration. What exists in these files clearly demonstrates to me, other regents and the chancellor that we did not have the full and complete story. That is unequivocal at this point, and that is why the majority of the board voted to set aside Mr. Burgdorf's report. I continue to request information in search of complete and understandable answers, many of which remain elusive to this day

TT: Does the possibility of impeachment give you any pause? Will it stop you from making future requests?

Hall: The simple threat of impeachment has already been very destructive. I'm not sure what message the House is sending to our board volunteers around the state. If, in your official capacity with a sworn duty, you encounter financial malfeasance, are you to stop and cover it up? Is that really what they want? I hope not. They are making the price for doing one's duty exceedingly high. I think that is tragic. I will continue perform my duties, and if I think I need to make more requests, I will do so.

TT: Are you on a "witch hunt" or a "fishing expedition" to dig up any dirt you can on Bill Powers?

Hall: No. There are two primary issues that appear to be the source of President Powers discontent with my efforts. One is development, and the other is the Law School situation. On the first issue, under President Powers leadership, UT knowingly and improperly counted over $215 million in gifts that simply did not exist. These totals have now been removed from the national reports. Hardly a witch hunt.

The law school, on the other hand, came to the board’s attention in December of 2011 through an open records request by law school faculty resulting in President Powers calling the [board] chairman and the chancellor.

All I have done, with the full support of the chancellor and the majority of the board, is to seek the facts, which have been in question from December of 2011. Almost immediately after the board was told of [University of Texas at Austin School of Law] Dean [Larry] Sager's half-a-million-dollar concealed and unauthorized grant to himself, President Powers gave a statement to the press saying that "nothing illegal or improper" had taken place.

I think the validity of his statement is very much in question at this point. Once again, hardly a witch hunt. It would be irresponsible for this board to ignore this issue.

TT: Should Bill Powers be fired?

Hall: I have tremendous respect for Chancellor [Francisco] Cigarroa, and to the extent he felt any of our leadership became compromised or a distraction to an institution’s mission, I would vote to remove.

TT: Do you believe you have committed any impeachable offenses? If not, why do you think some lawmakers seem to believe otherwise?

Hall: If I thought I had done something deserving impeachment, I would resign, and I'm not resigning. I am not prepared at this point to suggest a motivation for this unprecedented course of action, but it is extraordinary, though, if my efforts to expose financial malfeasance results in this form of rebuke.

TT: Why were some lawsuits included on your regent application while others were not?

Hall: I have supplemented my application at the request of the governor's office to include the suits in question. These suits were not included previously, as I thought they were not material and therefore should not be included. I still do not believe them to be worthy of inclusion. I discussed these suits with the governor’s staff contemporaneous with my application, and I was not asked to add them to the application. Those suits that did merit inclusion were submitted.

TT: Do you, as has been hinted at by the governor's office and others, have evidence that some lawmakers are using their influence to secure admission to UT-Austin for individuals who are not otherwise qualified?

Hall: I’m not jumping to any conclusions on this subject one way or another, nor would this be my determination at the end of the day.

TT: Much has been made of your interest in UT-Austin's development efforts. At a regents meeting earlier this year, why did you press Bill Powers on whether or not he had a VP of Development?

Hall: UT was, and is, in a major eight-year comprehensive capital campaign. It was inconceivable to to me that there was no senior development person with the authority to make strategic decisions and coordinate the needs of the deans. None of UT-Austin's aspirational peers operate this way, and missteps like the nonmonetary gift problem never would have happened. The chancellor had requested in fall that President Powers fill the role, but nothing happened. I wanted to know why. Seemed like a reasonable question. Remember that this is the single greatest opportunity for UT to raise revenue and engage its community and we were [missing] and continue to miss huge opportunities because of this organizational flaw.

TT: On a related note, why did you fly all the way to D.C. for a discussion with CASE about in-kind software donations?

Hall: All of our institutions, including the System, are members of CASE, an association of over 3,800 institutions worldwide. The members set the policies and we had a situation where one of our schools didn't like the existing rules and wanted to argue with CASE. Vice Chancellor [Randa] Safady had already told UT that they were not in compliance. The chancellor repeated it to them. They were advised internally that they were not in compliance, and still they wanted to spend $70,000 with outside counsel to argue a moot issue. The issue was significant. Claiming $200 million dollars in charitable gifts that didn't exist, is not appropriate.

Even after this episode, President Powers still wanted to have a second set of books, if you will. One campaign total for CASE publication — less the $200 million — and another campaign total with the phantom $200 million included for our volunteers and donors. The chancellor rightly said no.

TT: Do you feel the matter with the University of Texas Law School Foundation has been settled? Do you believe it was adequately investigated?

Hall: Clearly the answer is no and no.

TT: Do you have faith in the attorney general's current investigation into the matter?

Hall: I believe that Mr. Scott in the AG's office will perform his investigation to the highest professional standards. It will be a significant task and his report will be heavily scrutinized for accuracy and completeness. I do have faith in their investigation.

TT: How do you believe the current controversy can or should be resolved?

Hall: I think the Legislature should allow this board to function without undue influence, which has been overwhelming to date and is now becoming intimidating. This board has been incredibly productive under Chairman [Gene] Powell's leadership, and frankly it is capable of much, much more.

TT: What do you say to people who contend that the role of the board is to govern rather than to investigate to the extent that you appear to be doing?

Hall: Govern? Absolutely. Ignore problems? No. I have always admired one company’s philosophy that, no matter where you were in the employment chain, manager or mechanic, if you were presented with a problem, you owned it until it was resolved. It’s a strong cultural objective, and one that I admire in effective boards.

TT: How much influence does the governor have on your actions? How about the board's as a whole?

Hall: I have personally never seen the governor attempt to influence this board or our actions.

TT: Why does the board appear to be so divided? If you are simply calling for transparency, why don't you appear to have more support among your own colleagues?

Hall: People who believe this should look at the facts. I have been in the majority on every single important vote taken to date. Our leadership is solid, and the majority of this board embraces transparency without reservation.

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